San Jose Votes to Hire Agencies to Collect $21 Million

As expected, the city of San Jose, Calif., Tuesday night approved the hiring of a pair of collection agencies to help the municipality recover an estimated $21 million in outstanding debt (“San Jose Could Hire Collection Agencies,” May 13).

The city also wrote off $3.5 million of the debt, though Finance Director Scott Johnson said during the city council meeting that San Jose will still try to recover those funds.

The delinquencies are from a combination of individuals and businesses, with some nearly 20 years old. The debts range from $5,000 to $90,000 and are from unpaid fees, taxes and rent or damage to city property. Some of the debtor companies are still under contract to the city, so the municipality will look to collect the fees during contract renewal.

Though the city had intensified its collection efforts in the last year, the effort wasn’t enough to overcome limited staffing and budget cuts that had reduced collection efforts earlier, according to Johnson.

The collection agencies will be paid a percentage of the amount they recover.

San Jose’s action came a week after the Vallejo, Calif., City Council voted to file for bankruptcy (“Vallejo, Calif. Files for Bankruptcy,” May 8).